What Is Marketing?

Marketing is a process by which companies create value for customers and build
strong customer relationships in order to capture value from customers in
return.
Another definition
Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large

The Marketing Process

presents a simple, five-step model of the marketing process for creating
and capturing customer value.

A- Understanding the Marketplace and Customer Needs

We examine five core customer and marketplace concepts:

(1) needs, wants, and demands;
(2) market offerings (products, services, and experiences);
(3) value and satisfaction;
(4) exchanges and relationships;
(5) markets.
1-Customer Needs, Wants, and Demands

 Human needs are states of felt deprivation.

 They include basic physical needs for food, clothing, warmth, and safety; social
needs for belonging and affection; and individual needs for knowledge and self-
expression.

 Marketers did not create these needs; they are a basic part of the human
makeup.

 Wants The form human needs take as they are shaped by culture and individual
personality.

 Wants are shaped by one’s society and are described in terms of objects that will
satisfy those needs. When backed by buying power, wants become demands.

2- Market Offerings—Products, Services, and Experiences

 Consumers’ needs and wants are fulfilled through market offering

 Market offerings Some combination of products, services, information, or

experiences offered to a market to satisfy a need or want.

 Marketing myopia The mistake of paying more attention to the specific products
a company offers than to the benefits produced by these products.

 They are so taken with their products that they focus only on existing wants and
lose sight of underlying customer needs.
(they should focus on satisfy customers need rather than selling products)
3- Customer Value and Satisfaction

 Satisfied customers buy again and tell others about their good experiences.
Dissatisfied customers often switch to competitors and disparage the product to
others.

 Marketers must be careful to set the right level of expectations. If they set
expectations too low, they may satisfy those who buy but fail to attract enough
buyers.If they set expectations too high, buyers will be disappointed

4- Exchanges and Relationships

 Marketing occurs when people decide to satisfy their needs and wants through
exchange relationships.

 Exchange is the act of obtaining a desired object from someone by offering

something in return.

 Marketing consists of actions taken to create, maintain, and grow desirable

exchange relationships with target audiences involving a product, service, idea,
or other object.

5- Markets
 A market is the set of actual and potential buyers of a product or service.

 These buyers share a particular need or want that can be satisfied through
exchange relationships.

 Marketing means managing markets to bring about profitable customer

relationships.
However, creating these relationships takes work. Sellers must search for and engage
buyers, identify their needs, design good market offerings, set prices for them,
promote them, and store and deliver them

• Value: a combination of quality, service, and price (qsp: the customer value
triad)
• Satisfaction: a person’s judgment of a product’s perceived performance in
relationship to expectations
• Competition: all the actual and potential rival offerings and substitutes a
buyer might consider.

Key Customer Markets

• Consumer markets
• Business markets
• Global markets
• Nonprofit & governmental markets

B-Designing a Customer Value–Driven Marketing Strategy

and Plan
 Once it fully understands consumers and the marketplace, marketing
management can design a customer value–driven marketing strategy.

 marketing management as the art and science of choosing target markets

and building profitable relationships with them.

 the marketing manager must answer two important questions

i. What customers will we serve (what’s our target market)?
ii. How can we serve these customers best (what’s our value proposition)?

Selecting Customers to Serve

 The company must first decide whom it will serve. It does this by dividing
the market into segments of customers (market segmentation) and
selecting which segments it will go after (target marketing).

 Ultimately, marketing managers must decide which customers they want to

target and on the level, timing, and nature of their demand. Simply put,
marketing management is customer management and demand
management.

Choosing a Value Proposition

 The company must also decide how it will serve targeted customers—how it
will differentiate and position itself in the marketplace.
 A brand’s value proposition is the set of benefits or values it promises to
deliver to consumers to satisfy their needs.

Marketing Management Orientations

 There are five alternative concepts under which organizations design and
carry out their marketing strategies: the production, product, selling,
marketing, and societal marketing concepts

Societal
Production Product Selling Marketing
Marketing
concept concept concept concept
concept

production concept the idea that consumers will favor products that are available and highly
affordable; therefore, the organization should focus on improving production and distribution efficiency.

This concept is one of the oldest orientations that guides sellers.

product concept The idea that consumers will favor products that offer the most quality,
performance, and features; therefore,the organization should devote its energy to making continuous
product improvements.

Selling concept The idea that consumers will not buy enough of the firm’s
products unless the firm undertakes a large-scale selling and promotion effort.
The selling concept is typically practiced with unsought goods—those that buyers
do not normally think of buying, such as life insurance or blood donations. These
industries must be good at tracking down prospects and selling them on a
product’s benefits.
Such aggressive selling, however, carries high risks. It focuses on creating sales
transactions rather than on building long-term, profitable customer relationships.
Marketing concept A philosophy in which achieving organizational goals depends
on knowing the needs and wants of target markets and delivering the desired
satisfactions better than competitors do.

MARKETING VS SELLING CONSEPT

Selling concept, it starts with the factory, focuses on the company’s existing
products, and calls for heavy selling and promotion to obtain profitable sales. It
focuses primarily on customer conquest—getting short-term sales with little
concern about who buys or why.

Marketing concept The marketing concept starts with a well-defined market,

focuses on customer needs, and integrates all the marketing activities that affect
customers. In turn, it yields profits by creating relationships with the right
customers based on customer value and satisfaction.

Societal marketing concept The idea that a company’s marketing decisions

should consider consumers’ wants, the company’s requirements)profits),
consumers’ long-run interests, and society’s long-run interests.
C-Preparing an Integrated Marketing Plan and Program

 the marketer develops an integrated marketing program that will actually

deliver the intended value to target customers.

 The marketing program builds customer relationships by transforming the

marketing strategy into action

 It consists of the firm’s marketing mix, the set of marketing tools the firm
uses to implement its marketing strategy.
To deliver on its value proposition, the firm must first create a need-satisfying
market offering (product). It must then decide how much it will charge for the
offering (price) and how it will make the offering available to target consumers
(place). Finally, it must engage target consumers, communicate about the
offering, and persuade consumers of the offer’s merits (promotion).

D- Managing Customer Relationships and Capturing

Customer Value
 Customer relationship management The overall process of building and
maintaining profitable customer relationships by delivering superior
customer value and satisfaction.

 A customer buys from the firm that offers the highest customer-perceived
value
 customer-perceived value —the customer’s evaluation of the difference
between all the benefits and all the costs of a market offering relative to
those of competing offers.

 Customer satisfaction the extent to which a product’s perceived

performance matches a buyer’s expectations.

 the product’s performance falls short of expectations, the customer is

dissatisfied. If performance matches expectations, the customer is satisfied.
If performance exceeds expectations, the customer is highly satisfied or
delighted.

 Most studies show that higher levels of customer satisfaction lead to

greater customer loyalty, which in turn results in better company
performance

Customer Relationship Levels and Tools

 marketers can use specific marketing tools to develop stronger bonds with
customers.

 For example, many companies offer frequency marketing programs that

reward customers who buy frequently or in large amounts. Airlines offer
frequent-flier programs, hotels give room upgrades to frequent guests, and
supermarkets give patronage discounts to “very important customers.”
Significant changes are occurring in the nature of customer–brand relationships.
 Today’s digital technologies—the internet and the surge in online, mobile,
and social media—have profoundly changed the ways that people on the
planet relate to one another
Customer-engagement marketing Making the brand a meaningful part of
consumers’ conversations and lives by fostering direct and continuous
customer involvement in shaping brand conversations, experiences, and
community.

 The burgeoning internet and social media have given a huge boost to
customer engagement marketing.

 Greater consumer empowerment means that companies can no longer rely

on marketing by intrusion. Instead, they must practice marketing by
attraction—creating market offerings and messages that engage consumers
rather than interrupt them.

Consumer-generated marketing Brand exchanges created by consumers

themselves—both invited and uninvited— by which consumers are playing an
increasing role in shaping their own brand experiences and those of other
consumers.

 This might happen through uninvited consumer-to-consumer exchanges in

blogs, video-sharing sites, social media, and other digital forums

partner relationship management Working closely with partners in other

company departments and outside the company to jointly bring greater value to
customers.
 Marketers must partner with suppliers, channel partners, and others
outside the company. Marketing channels consist of distributors, retailers,
and others who connect the company to its buyers.

E-Capturing Value from Customers

 By creating superior customer value, the firm creates satisfied customers
who stay loyal and buy more
 Keeping customers loyal makes good economic sense. Loyal customers
spend more and stay around longer
 Losing a customer means losing more than a single sale. It means losing the
entire stream of purchases that the customer would make over a lifetime of
patronage.

Customer lifetime value is the value of the entire stream of purchases that the
customer would make over a lifetime of patronage.

Customer equity is the total combined customer lifetime values of all of the
company’s customers.

Building the Right Relationships with the Right Customers

Companies should manage customer equity carefully. They should view
customers as assets that need to be managed and maximized. But not all
customers, not even all loyal customers, are good investments.
The company can classify customers according to their potential profitability and
manage its relationships with them accordingly.

Butterflies we can enjoy them for only a short while and then they’re
gone. There is a good fit between the company’s offerings and their needs.

True friends are both profitable and loyal. There is a strong fit between their
needs and the company’s offerings. The firm wants to make continuous
relationship investments to delight these customers and engage, nurture, retain,
and grow them.
Strangers show low potential profitability and little projected loyalty. There is
little fit between the company’s offerings and their needs.
Barnacles are highly loyal but not very profitable. There is a limited fit between
their needs and the company’s offerings

The Changing Marketing Landscape

Every day, dramatic changes are occurring in the marketplace

We look at five major developments: the digital age, the changing economic
environment, the growth of not-for-profit marketing, rapid globalization, and the
call for sustainable marketing practices.
The Digital Age: Online, Mobile, and Social Media Marketing
Digital and social media marketing Using digital marketing tools such as
websites, social media, mobile apps and ads, online video, email, and blogs
to engage consumers anywhere, at any time, via their digital devices.

Beyond brand websites, most companies are also integrating social and mobile
media into their marketing mixes.

There’s is new market channels has emerged social media market and mobile
market

The Changing Economic Environment

More than ever, marketers are emphasizing the value in their value propositions.
They are focusing on value for the money, practicality, and durability in their
product offerings and marketing pitches

The Growth of Not-for-Profit Marketing

In recent years, marketing has also become a major part of the strategies
of many not-forprofit organizations, such as colleges, hospitals,
museums, zoos, symphony orchestras, foundations, and even churches.
The nation’s not-for-profits face stiff competition for
support and membership. Sound marketing can help them attract
membership, funds, and support.
Rapid Globalization
marketers are also taking a fresh look at the ways in which they relate with the
broader world around them.
Today, almost every company, large or small, is touched in some way by global
competition.
Sustainable Marketing—The Call for More Environmental and Social
Responsibility
today’s marketers are being called on to develop sustainable marketing practices.
Corporate ethics and social responsibility have become hot topics for almost
every business. And few companies can ignore the renewed and very demanding
environmental movement